With Eurozone leaders tonight in Brussels rushing to disagree about things that don’t matter — debt sanctions? all EU members? a revised treaty? really? — it is increasingly obvious that they live by one of my favorite lines from Animal House:

No, I think we have to go all out. I think that this situation absolutely requires a really futile and stupid gesture be done on somebody’s part!

New paper uses Twitter keywords over last three years to try and characterize our happiness, or lack thereof, over last three years. It’s amusing, has an interesting methodology and is mostly well-done, so worth a look. Here is the key graph, showing that we’re apparently sadder (less happy?) than when Lehman failed. (Click for a larger version.)

What sustained borrowing without third-party enforcement in the early days of sovereign lending? Philip II of Spain accumulated towering debts while stopping all payments to his lenders four times. How could the sovereign borrow much and default often? We argue that bankers’ ability to cut off Philip II’s access to smoothing services was key. A form of syndicated lending created cohesion among his Genoese bankers. As a result, lending moratoria were sustained through a `cheat-the-cheater’ mechanism. Our article thus lends empirical support to a recent literature that emphasises the role of bankers’ incentives for continued sovereign borrowing.

MF Global’s bankruptcy revelations concerning missing client money suggest that funds were not inadvertently misplaced or gobbled up in MF’s dying hours, but were instead appropriated as part of a mass Wall St manipulation of brokerage rules that allowed for the wholesale acquisition and sale of client funds through re-hypothecation. A loophole appears to have allowed MF Global, and many others, to use its own clients’ funds to finance an enormous $6.2 billion Eurozone repo bet.